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Ireland’s accelerated reform of white collar laws continues apace

The Irish Government’s commitment to tackling corruption and white collar crime continues to manifest itself in ongoing legal reform. In our last article, in May 2012, we discussed the findings of the Mahon Tribunal of Inquiry into Certain Planning Matters and Payments (the Mahon Tribunal Report). A significant portion of the Report was dedicated to analysing the deficiencies of Ireland’s anti-bribery and anti-corruption laws and making recommendations regarding the legal reforms required to address these. The recent publication of two far reaching pieces of legislation aimed at protecting whistleblowers and preventing bribery/corruption sends out a clear signal to the international community that Ireland is committed to adopting a best practice standard in all aspects of our white collar laws.

The Protected Disclosures in the Public Interest Bill 2012

Ireland’s current whistleblowing law is fragmented and inconsistent, with varying degrees of protection offered to whistleblowers in certain sectors. The Protected Disclosures in the Public Interest Bill 2012, which is due to become law later this year, is aimed at offering consistent pan-sectoral protection to whistleblowers who report impropriety in good faith. It has been influenced heavily by long established legislation in the United Kingdom (PIDA 1998), South Africa (PDA 2000) and New Zealand (PDA 2000). It encourages workers to come forward without fear of retaliation by providing six channels for workers to make “protected disclosures” in good faith regarding a wide range of improprieties, while at the same time providing them with limited civil/criminal immunity. There are tiered criteria for this immunity, depending on whether the matter is being reported to the employer, to a regulator or to the media. If the worker satisfies these immunity criteria, he/she will be protected from being subjected to occupational detriment for making a protected disclosure. There will also be remedies available, including a right of action in tort that provides redress for workers who suffer detriment as a consequence of whistleblowing.

The Criminal Justice (Corruption) Bill 2012

Ireland’s current corruption laws are complex, outdated and limited in scope. The Criminal Justice (Corruption) Bill 2012, when enacted, will repeal seven overlapping Corruption Acts and replace them with a single and comprehensive piece of legislation. It will update the existing offences relating to bribery and corruption and will introduce a number of new offences, such as “trading in influence” and “making reckless payments”.

As predicted in our last article, the Bill has significant echoes of the United Kingdom’s Bribery Act and contains provisions that will render companies criminally liable for corrupt acts committed by their directors, managers, officers, employees, subsidiaries or agents, where the corruption was intended to obtain or retain business for the company. The only defence available to a company in this scenario will be to show that it took all “reasonable steps” and exercised all “due diligence” to prevent the corruption taking place.

The Bill also provides that a company’s officers and senior personnel are criminally liable if they are found to have consented to, or connived in, the commission of corruption offences by the company. They are also criminally liable if they are found guilty of “wilful neglect” in relation to the commission of corruption offences by the company.

If the legislation is introduced in its current form it will have a significant impact on the corporate governance landscape for commercial entities operating in Ireland. Such businesses will be required to have appropriate supervisions and controls in place to ensure that they do not facilitate the commission of bribery or other corrupt activities by their employees or other business associates.

The Bill includes extra-territorial provisions criminalising corrupt acts committed outside Ireland by certain categories of person, including Irish citizens, Irish public officials, Irish companies and persons whose principal residence has been Ireland for the 12 months immediately preceding the commission of a corruption offence.

The Bill also focuses heavily on the bribery of public officials. It will create a number of presumptions of corruption, for example where a

Person with an interest in the functions being discharged by a public official makes a payment to that official.

Public official has a lifestyle or property out of proportion to their official income and declared interests.

Public official accepts a gift in breach of ethics.

The effect of these presumptions will be to put the onus on the accused person to put forward proof in relation to the legitimacy of the impugned payment, spending or gift, hence making the job of the prosecutor easier. It will be interesting to see whether this presumption survives the constitutional challenge that is likely to materialise when these offences are prosecuted.

Stiff penalties of up to 10 years imprisonment and unlimited fines are envisaged for persons convicted on indictment. In addition, the courts are to be given new powers to remove public officials from office and to exclude them from holding office for up to 10 years.

Conclusion

Although Ireland’s current whistleblowing and anti-corruption laws are somewhat outdated, in other respects Ireland has already been quite innovative in tackling white collar crime. For example, our Criminal Assets Bureau, which was established in 1996, has been successful in seizing hundreds of millions worth of criminal proceeds has been mimicked in several other jurisdictions. Similarly, Ireland arguably went one step further than any comparable jurisdiction in August of last year with the introduction under the Criminal Justice Act 2011 of a new criminal offence of failing to report to the police information that might assist them in preventing, investigating or prosecuting white collar crime. This mandatory reporting obligation for white collar crime is assisting the Irish police in detecting crime they may otherwise be unaware of. The proposals outlined above will, however, help Ireland address two remaining deficiencies in our current law and bring us into line with international best practice.

This article was authored by Kenan Furlong & Gillian McDonald of A&L Goodbody.

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